BNP says that the ECB's President Mario Draghi's message at his press conference was clear:

The ECB will remain focused on the "full implementation" of its asset-purchase programme until it has achieved a sustained increase in inflation

The fact that its vow came in tandem with a more positive assessment of the eurozone's growth prospects - and the associated risks - made the central bank's statement of intent all the more powerful

  • Despite the clear and unequivocal message, though, speculation that the ECB might scale back its asset purchases, or end the programme earlier than its intended date of September 2016, however, is unlikely to evaporate
  • Professional forecasters expect higher growth and inflation amid a perception that the ECB's quantitative easing (QE) will boost growth and change the dynamics of inflation
  • Next week's surveys - the April eurozone flash composite PMI, EU consumer sentiment, the German ZEW poll and the Ifo index - in which we expect further improvement, should add to this picture of a healthier economic outlook

But ...

  • The key is the 'underlying' trend in inflation and inflation expectations
  • BNP expect euro-area inflation to rise over the coming years, thanks to energy-related base effects and the impact of the weaker EUR, but it should remain subdued overall and lower than the ECB staff projects
  • There is still a sizable output gap, which will close only gradually
  • Fiscal and structural adjustment underway in some countries are likely to contain the rise in inflation
  • This should allow the ECB to continue with its asset purchases until September 2016, as planned, as should risk factors, such as sluggish Chinese growth, geopolitical developments and the persistent debacle over Greek finances

(I posted the BNP view on Greece earlier)